Los Angeles County Economic Development Corp. (LAEDC), a nonprofit economic development group, indicated in its latest weekly economic outlook for the region and state that energy this summer could be a worrisome component of the state’s sagging economy. It particularly targeted the potential ill-effects of high natural gas prices, which could be felt more severely in the East than the West, the forecast noted.

“The current cool weather will not last forever,” wrote economist George Huang in LAEDC’s forecast for the week of June 9-15. “When the mercury goes up, electricity grid operators get nervous.” He credited last year’s relatively cooler summer in California for preventing blackouts, adding “we may not be so lucky this summer.”

“When the energy crisis eased a bit, some of the efforts to boost supply lost momentum. Some of the proposed power plants will apparently not be built on time, if at all.” Huang characterized the nation as facing a “critical natural gas shortage” this summer, noting that the U.S. gas storage inventory is the lowest on record (kept since 1976). “Prices have spiked to levels near the recent peak in late 2000/early 2001.

“Natural gas is the fuel of choice for new power plants and many factories for production processes,” he wrote in part of the LAEDC’s weekly forecast published online. “A high price or even supply shortage will lead to higher electricity prices and hit every factory and household directly or indirectly. The situation is not as dire in the West as in the East, but we will not be shielded from the national trend of low supply and high prices.”

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